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Cheap vaccines hit market

Billionaire cuts prices lower than big drugmakers

– Indian billionaire Cyrus Poonawalla, founder of the world’s biggest maker of vaccines, will slash the price of polio immunization and introduce shots for diarrhea and pneumonia, undercutting Pfizer and GlaxoSmithKline.

Poonawalla, who set up the Serum Institute of India in 1966, will use last year’s acquisition of a Dutch vaccine business to add the injectable form of polio inoculation to the oral drops the Pune-based company supplies to organizations such as the United Nations Children’s Fund, he said. The closely held group also plans to sell a low-cost pneumococcal shot to compete with Pfizer’s $4 billion Prevnar pneumonia vaccine by 2016.

The plan by Serum Institute, which says it supplies vaccines used to immunize two out of three children worldwide, will “revolutionize” efforts to eradicate polio that affects nerves and results in paralysis, said Bruce Aylward, assistant director-general at the World Health Organization.

The Bill & Melinda Gates Foundation, a key funder of the effort to exterminate the malady, has backed the proposal as oral drops, made of live virus, carry the risk of infection.

“On May 30, Mr. Gates came over for a private dinner at my house” and asked that Serum Institute remain family-owned, Poonawalla, 71, who also rears thoroughbred racehorses, said in an interview at the company’s headquarters.

“The obvious reason was that, as soon as we sell the company, ‘big pharma’ would immediately double the price of vaccines.”

Poonawalla, who started Serum Institute by raising $12,000 selling horses, has his own expansion plan. He bought Bilthoven Biologicals six months ago to gain technology, expertise and manufacturing facilities in the Netherlands.

The facility makes an injectable vaccine based on an inactive form of polio virus developed by Jonas Salk in the 1950s, and is one of four facilities in the world with the capability, according to Martin Friede, a scientist at the World Health Organization in Geneva.

“We decided to go in for the acquisition of this plant with the encouragement of the Gates Foundation,” Poonawalla said. “This plant would be scaled up for production, as we’ve done in all our other vaccines, to give 100 percent of the requirement to the rest of the world.”

London-based Glaxo and Paris-based Sanofi are the largest suppliers of injectable polio vaccine, which is used in most developed countries to protect children against crippling poliomyelitis. Developing countries such as India use the oral formulation developed by Albert Sabin which contains live, weakened virus that’s easier and cheaper to administer.

India, the world’s second-most populated nation, hasn’t reported a polio infection since January 2011, according to government data, while neighbor Pakistan is close to eliminating a strain of the virus.

Occasionally, the Sabin vaccine virus mutates back to a virulent strain and sparks immunization-derived polio outbreaks. That risk will deter governments and United Nations agencies from using the Sabin vaccine as the world comes closer to eradicating polio, requiring a switch to injected products based on inactivated polio virus, Poonawalla said.

The company “could really revolutionize the polio endgame,” said WHO’s Aylward. “They are potentially the most exciting game in town.”

Serum Institute will enter the injectable polio vaccine market with a shot costing as little as 93 cents in multidose vials, he said. That compares with the current price of about $3.37 per shot, Poonawalla said.

The U.S. Centers for Disease Control and Prevention has a contract with Sanofi ending in March to buy e-IPV, an enhanced-strength injectable polio vaccine, at $12.24 a dose, the Atlanta-based agency says on its website.

The company’s strategy of not spending on advertisements and waiting for demand for the vaccines to increase has helped it control costs, Poonawalla said.